Broad based buying helps Indian markets to trade near intraday highs

A broad based buying at Banking and IT counters helped Indian equity benchmarks to trade near their intraday high points in early afternoon deals, with both Sensex and Nifty holding notable gains, amid positive cues from other Asian markets. Domestic sentiments remained optimistic, as the Ministry of Commerce & Industry said that the World Intellectual Property Organization (WIPO) treaty on intellectual property, Genetic resources and associated traditional knowledge, is a significant win for countries of the global South and for India, which is a mega biodiversity hotspot with abundance of traditional knowledge, and wisdom. 

On the global front, Asian markets were trading mostly in green, after Japan's leading index improved slightly in March, revised from a decline estimated initially. The latest data from the Cabinet Office showed that the leading index, which measures future economic activity, rose to 112.2 in March from 112.1 in the previous month. In the initial estimate, the score was 114.1. Meanwhile, the coincident index strengthened to 113.6 in March from 111.5 a month ago. The latest score was revised down from 113.9. The coincident index measures the current economic situation.

Back home, pharma stocks were in watch, as credit rating agency India Ratings and Research (Ind-Ra) in its latest report has said that US-focused pharma companies are likely to sustain their revenue improvement trend in FY25, amid heightened drug shortages in the US market. As per the agency, this will not only provide potential for volume growth, but also limit price erosion to single digits over the next 12-18 months, leading to improved returns.

The BSE Sensex is currently trading at 75888.45, up by 478.06 points or 0.63% after trading in a range of 75404.82 and 75900.75. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.59%, while Small cap index was up by 0.13%.

The top gaining sectoral indices on the BSE were Bankex up by 1.05%, IT up by 0.97%, Realty up by 0.84%, TECK up by 0.77% and Consumer Durables up by 0.56%, while Oil & Gas down by 0.65%, Energy down by 0.42%, Power down by 0.29%, Basic Materials down by 0.11% and Utilities down by 0.10% were the top losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 1.74%, Indusind Bank up by 1.66%, HDFC Bank up by 1.50%, Bajaj Finance up by 1.13% and ICICI Bank up by 1.11%. On the flip side, Wipro down by 1.96%, NTPC down by 1.27%, Maruti Suzuki down by 0.60%, Reliance Industries down by 0.34% and Sun Pharma down by 0.25% were the top losers.

Meanwhile, highlighting the importance of small finance banks (SFBs) in fostering financial inclusion, former Financial Services Secretary D K Mittal has said most of them would not clamour to become universal banks if some restrictions are eased by the Reserve Bank of India (RBI). To promote financial inclusion in the country, RBI, in 2014, issued the guidelines for licensing of SFBs in the private sector. Following this, RBI granted licences to a dozen entities. As per the RBI guidelines, SFBs are required to open at least 25 per cent of their branches in unbanked rural centres and are mandated to provide 75 per cent of loans to the priority sector compared to 40 per cent for the commercial banks. Recently, the RBI invited applications from small finance banks meeting specified criteria, including a minimum net worth of Rs 1,000 crore, for becoming regular or universal banks.

The Secretary said while issuing guidelines for SFBs to become universal banks, it would be in the larger national interest of financial inclusion if RBI lifts some of the restrictions imposed on such SFBs including tag of SFBs. Talking about restrictions, he said, the RBI should consider allowing co-lending, pass through certificate (PTC) and securitisation, and setting up of subsidiaries. Idea should be to make them at par with commercial banks except for three basic principles of priority sector, below 25 lakh and Basel II for capital, he said, adding that these should work as universal banks with a differentiated focus on financial inclusion. 

He further said after all they comply with all guidelines applicable to universal banks except a few related to capital but with additional responsibility of 75 per cent priority sector and 50 per cent below Rs 25 lakh lending. This will ensure that customers look at all commercial banks as equal which is so. He added that if it is done, they would be as good as a universal bank with the added responsibility of furthering the objective of financial inclusion and serving the population of the lowest strata of society. This will also ensure that most SFBs would not clamour to become universal banks.

The CNX Nifty is currently trading at 23082.35, up by 125.25 points or 0.55% after trading in a range of 22932.00 and 23083.20. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Divi's Lab up by 4.24%, Indusind Bank up by 1.80%, Larsen & Toubro up by 1.80%, HDFC Bank up by 1.47% and Adani Ports & SEZ up by 1.37%. On the flip side, Wipro down by 1.97%, ONGC down by 1.92%, Eicher Motors down by 1.73%, Adani Enterprises down by 1.62% and Grasim Industries down by 1.42% were the top losers.

Asian markets were trading mostly in green; Hang Seng advanced 233.77 points or 1.26% to 18,842.71, Shanghai Composite strengthened 29.53 points or 0.96% to 3,118.40, Straits Times rose 4.51 points or 0.14% to 3,321.07, KOSPI increased 35.39 points or 1.3% to 2,722.99, Nikkei 225 surged 253.91 points or 0.65% to 38,900.02 and Taiwan Weighted added 238.43 points or 1.09% to 21,803.77, while Jakarta Composite was down by 4.69 points or 0.06% to 7,217.69.